• by Wendy Davis  @wendyndavis, July 8, 2009

Cosmetics giant Mary Kay has sued Yahoo for trademark infringement for allegedly inserting links to unauthorized retailers in personal email messages that Mary Kay sellers send to their consumers.

"Emails that advertise Mary Kay products are hijacked and manipulated by Yahoo and provide an unfair advantage for the unauthorized re-sellers and other competitors," the company alleges in its lawsuit, filed Tuesday in federal district court in Dallas.

The cosmetics company is seeking an injunction and monetary damages. "We want Yahoo to stop doing what it's doing," says Mary Kay spokesman Crayton Webb. "Yahoo mail needs to stop infringing on our trade name."

Yahoo declined to comment on the case.

In its lawsuit, Mary Kay specifically complains about an ad format that sends pop-ups to users when they scroll over text in emails. These pop-ups allegedly contain links to sites run by unauthorized sellers of Mary Kay cosmetics.

Yahoo appears to have begun inserting these types of in-email ads earlier this year. Webb says Mary Kay learned of the practice this spring, after some consultants and company employees began noticing such ads in emails.

This lawsuit joins a host of others that complain about the use of brand names to trigger online ads, but contains some unique wrinkles. For one, most of the prior lawsuits dealing with this issue have been sparked by ads in search results or pop-up ads served by adware companies.

But this action appears to mark the first time a company has complained about links in personal emails -- a distinction that some lawyers say could prove important because it could help Mary Kay show that consumers are confused by such ads.

"The likelihood of consumer confusion is dramatically enhanced in my view," says false advertising and trademark law expert Norman Simon, a partner with Kramer Levin Naftalis & Frankel.

In fact, Mary Kay argues in its complaint that many email recipients might "mistakenly believe that the hyperlinks and pop-ups which include ads associated with the Mary Kay marks were affirmatively included or authorized by either Mary Kay or the Independent Beauty Consultant sending the email."

But another facet of this lawsuit could make it harder for Mary Kay to prevail. Although Mary Kay is complaining about unauthorized resellers, people typically are allowed to sell products without authorization as long as the products have been lawfully purchased.

The company objects to these resales for several reasons, including that some of the products might be expired, but it's not clear how the court will view the issue. Mary Kay did recently win a trademark infringement lawsuit in Texas against a former contractor, Amy Weber, who allegedly sold Mary Kay products online after discontinuing her affiliation with the company.